The Server Room Blog

Somebody Blew The Whistle on The ‘Nehalem’ Effect

bryce.olson@intel.com — Mon, 19 Oct 2009 20:24:19 GMT

There’s a video going around from one of Intel’s top external customers. Before you see this (video linked below) I wanted to position this correctly. I caught up with Mr. X at an undisclosed coffee shop and got his approval to share publicly the messages that we would have rather had him go out with. Those messages are as follows:

Mr. X’s 4 year old servers were a burden on his organization, he spent all of his budget on just maintenance, nothing left for innovation.

He looked at his old infrastructure and determined that replacing them with more powerful-energy efficient servers from Intel was a strategic investment.

The New intel Xeon 5500 based servers provided the opportunity for him to innovate again. He claimed that these new Intel Xeon Processor 5500 (Nehalem-EP) are the best enabler of IT business value that he's seen in years.

They boosted energy efficiency, saved him big $ and extended his facility lifespan – now he doesn’t have to go build a new data center.

He replaced his old servers in a 9:1 ratio (getting rid of 9 old and replacing with 1 new) that enabled him to cut operational expenditures by 90% …And that savings alone is paying for the investment in these new servers in just 8 months.

By strategically investing in IT when his competitors hunkered down and cut spending – he is now positioned to grow faster and gain share as the economic upturn arrives.

Ok, now that I’ve had a chance to convey his real messages, you can check out this video.

Nehalem - The Cash Machine that Keeps on Giving…For IT

bryce.olson@intel.com — Fri, 09 Oct 2009 01:17:36 GMT

In March '09, former Intel executive Pat Gelsinger predicted that Nehalem-based Xeon 5500 servers would become "cash machines" for the IT industry, due to unprecedented power-efficient performance gains that can deliver a very short ROI for IT. Pat's description of the Xeon 5500 was validated during a briefing with Intel CIO Diane Bryant in San Francisco on October 6^th, as reported in TG Daily.

She discussed the ROI achieved and the impact that a proactive serve refresh strategy has had on Intel’s bottom line, as reported in PC World. Some of her key points:

· Intel is expecting up to $250M savings over 8 years, saved $45M in 2008 alone.

· Despite these results, economy forced Intel to re-evaluate capital spending in 2009. Found that delaying server refresh would cost us $19M more than continuing. So we continued.

· Getting an average of 10:1 server consolidation with Xeon 5500 in design computing environment and 20:1 virtualization server refresh ratios in Office/Enterprise.

Did you know that Server Refresh is also the #1 driver of Intel’s Carbon Footprint reduction as well, with an initiative to reduce Carbon footprint by 5% per year. We are projected to reduce by approximately 4K metric tons (2009) and this server refresh strategy is forecasted to be #1 project to help IT reduce Carbon.

Staying on the green IT theme, the newest ally for IT to help drive carbon-reduction and energy cost savings is the energy utilities. A prime example of this is the Energy Trust of Oregon, who offers cash incentives to motivate Oregon businesses to make energy saving investments. Intel gained access to a $250K incentive from them as a result of energy savings gained by replacing older servers with newer, more energy-efficient servers in our data centers. If you are replacing older servers with modern energy-efficient Xeon 5500 based servers and you haven’t had this conversation with your utility yet – please do so. You may be eligible for utility incentives for energy savings that can lower your operating costs and reduce the impact of your business on the environment. To estimate the energy savings associated with server refresh, go to www.intel.com/go/xeonestimator.

You’re going to hear more about these “cash machines” in the very near future…stay tuned!

Bryce

Cash for Clunkers? Yes – It’s called Server Refresh.

bryce.olson@intel.com — Sun, 02 Aug 2009 22:32:07 GMT

You’ve seen it on the front pages of the papers lately. The program that offers consumers incentives to trade in older used cars for more fuel-efficient new cars is pushing auto sales into overdrive. The $1B in govt. funding for it was burned through in less than a week. The U.S. House of Representatives rushed through an additional $2B in emergency funds just to keep the program going, but will need Senate approval if it’s going to extend beyond Tuesday August 4^th. My guess is to make a continuation of the program palatable to the U.S. taxpayer, the incentive will need to be cut (from $4500 for a new fuel-efficient car to somewhere in the $1-2k range) but it’s great to seen people buying cars and stimulating part of the economy – while getting older fuel-inefficient cars off the roads.

I saw an interesting article talking about whether a similar program for servers would work…and though I think it’s a creative idea, I’ll argue that Intel and our OEM partners have been offering “Cash for Clunkers” for quite some time now – without any U.S. taxpayer help. How? Through promoting the benefits of server refresh, a strategy that is proving to be one of the most beneficial investments to IT and business. Using the Xeon ROI Estimator I spent 2-3 minutes modeling potential savings by comparing 4-year old 2P Intel Xeon based servers to new 2P Intel Xeon 5500 based servers – and this is what I found:

An investment in one Intel Xeon 5500 based server (~$8.5k including purchase price, migration cost, and software validation) enables up to 10x performance per server, a 10:1 server consolidation opportunity vs. 10 older servers purchased 4 years ago that as an IT manager I can now get rid of. So where’s the cash for the clunkers? Well, I would save over $4k a year in energy costs and over $11k a year in server / software maintenance costs by cutting out the old and putting in the new. The 4-year total savings is about $38k, with a break even period of about 9 months. Not bad…and that doesn’t even take into consideration software licensing costs that I probably can save by cutting down the server count. Try modeling this yourself and check out the new PowerPoint report that you can generate from it – really explains the benefits in a way that the finance and facilities folks will find useful.

I also found this link that explains why Intel IT decided to move ahead with server refresh in 2009 after current economic conditions forced Intel to re-evaluate the strategy. Analysis found that delaying server refresh for a year would increase costs by USD 19 million.

And a refresh strategy also applies to the bigger 4 Socket and above servers as well, as documented in this server refresh brief.

Server Refresh is a strategic investment for IT – the cash for clunkers program that keeps on giving.

bryce

BMW: Fast Cars. Fast Infrastructure

christopher.p.peters@intel.com — Mon, 22 Jun 2009 17:23:30 GMT

BMW automobiles are known for speed, agility, quality, style and probably some other attributes I’m forgetting. Their IT infrastructure requires the same attributes for them to remain competitive in their industry.

Proactive server refresh, now using Xeon 5500 are part of that equation. This recent case study outlines how BMWs migration to Xeon 5500 series lowers total cost of ownership and increases flexibility for their business.

Server refresh with Xeon 5500 delivers 30% higher IT performance with 75% less hardware, compared to dual core Xeon 5100 technology.

The case study also says that BMW’s next refresh target are their RISC based servers

Can you gain a competitive edge replacing aging servers in your infrastructure

Estimate your savings today (www.intel.com/go/xeonestimator)

Why Buy for the Little Guy

christopher.p.peters@intel.com — Mon, 30 Mar 2009 22:57:39 GMT

In my blog titled top 10 reasons to buy in a recession ,I discussed generic reasons to invest. While small businesses (and to some extent medium businesses) don’t have the scale to take advantage of some of the consolidation and cost savings gains discussed in my “why buy for the big guy” blog, the benefits of replacing older servers remains a strong value for smaller businesses also.

For those business owners who don’t have dedicated IT staff, your technology is depended on for reliable, efficient operation of the business. Technology is depended on to support daily operations and services ... like website operation, email communication, customer management, purchasing and record retention among other things. If not … then you (as business owner) must turn your attention away from customers and towards your technology platform – not something a you have the time or resources to do.

Before reading, you need to know that I’m not a small business owner but I do have a family (in many ways that is my business) and as such I have several computers at home to support the operation of my family. Recently, I experienced some issues with my existing computers that have put me in the market for replacement technology. Specifically, when doing my taxes this year and when trying to load TurboTax*, my computer did not have sufficient memory to support the new 2008 software version. Additionally, my wife and I track our finances with Quicken* and recently the slow performance on our computer has resulted in us spending too much time doing data entry on a slow computer. In essence, our technology now is limiting us from doing the things we need to do .. so time to upgrade .. and I am shopping for a new desktop.

These challenges are similar to what I foresee from small businesses when it comes to technology upgrades. Here are two examples of customers who, as a result of a growing demands and slowing performance of existing technology, turned to a Xeon-based server to streamline operations, boost reliabiilty, improve customer service, improve competitiveness and open up business possibilities for themselves.

ð Yellow River i-café. See How this small i-café went from a situation where a demanding workload caused hardware failures, leading to down time, loss of revenue, and frustrated customers to a situation where Yellow River saw performance gains and head room for growth by upgrading to an new Intel Xeon based server.

ð Lampworks. Read how Jason Harper of Lampworks went from “We knew that we’d hit the wall with our desktop-based server; it couldn’t bear the extra load. Our computer was suddenly a barrier to our growth, rather than a business enabler” ... to ... “We’re extremely excited about the growth possibilities that our new server gives us.”

As your technology ages, you have a choice. Typically standard OEM manufacturer warranties are supported for 3 years with purchase of a new server. Before you extend the warranty (for $800-1200 per server for additional two more years), evaluate the enhanced performance, improved energy efficiency and capability to replace many servers (either desktop or true server technology) with fewer new servers. If you are already at the end of your extended warranty, can you run the risk of server failure inside your business or can you afford the unexpected expense of a service call.

Additionally there are some government incentive programs, like the American Recovery and Reinvestment Act that offer businesses accelerated depreciation (60% first year vs standard 20%) on new computer hardware which can lower you 2009 tax burden and accelerate ROI.

Is your current technology holding you back or in your way? ... If so, consider a new server.

Chris

Global Recession Hits the Data Center – Millions at Risk!!!

christopher.p.peters@intel.com — Thu, 12 Feb 2009 09:05:09 GMT

Every morning we hear about the staggering job losses mounting up in businesses around the world. Hundreds of thousands of jobs have been lost so far. Unfortunately, no one seems immune from the impacts of this recession. In fact, the recession is now impacting the data center and a new segment of the work force is at risk – your servers!

Would you keep an employee who worked less than 4 hours per day, over-spent valuable resources and was someone you had to manage constantly – obviously, the answer is NO! That is the situation today with install base single-core servers. Aging servers are a perfect target for downsizing in this tough economy. Industry analyst IDC estimates that there are approximately 30 million servers installed in businesses around the world and about 40% of those use single-core processors (4 years old or older).

Let’s look at the 2008 performance review of these single core servers.

ð Excessive Spending Habits: For the performance they deliver, these servers take up too much space and over-consume power and cooling resources.

ð Lazy Work Habits: A typical non virtualized server runs at only 10-15% utilization – meaning they sit idle a majority of your work day.

ð Needs Excessive Management: Aging servers require more maintenance. Extended warranties are expensive (estimated $600-1200 per server depending on the type of server) and if you don’t extend the warranty, the risk of downtime is on IT and the business. While the costs to maintain a server vary widely , during a recent discussion with Forrester research, they indicated that an aging server can cost up 3x the costs of an in-warranty server (under standard 3 yr manufacturer support).

Continuing to use these old servers is not a wise business strategy. But if you fire your existing infrastructure, who can you hire to do the work? Simple, you hire fewer new multi-core servers running virtualization to replace a large number of install base servers.

But, is replacing them worth the effort … I mean, why fix what ain’t broke? About 2/3 of IT’s budget is consumed maintaining existing infrastructure (source Gartner), leaving a measly 1/3 for innovation and value add business capability. So in this recession, unless you are focused on reducing OpEx, the IT budget that you are cutting is likely restricting your business competitiveness and new service delivery - the value of innovation.

Replacing old servers with new offers both cost and productivity advantages for IT in addition to improved services and competitiveness for business. Read some of the success stories from businesses in 2008 where proactive IT investment commonly resulted in 30-40% reductions in total costs, enhanced business services, improved competitiveness and rapid financial ROI. In fact, the business ROI on replacing an old server with new is staggering and in many cases can pay for itself in less than 12 months, by reducing power / cooling costs, avoiding new construction, simplifying and reducing maintenance costs, reducing applicaiton and OS licensing costs and more.

What characteristics should you look for in a new server hire? (to maximize this savings and accelerate ROI)

ð Versatile Performance. Consider a wide range of benchmarks and application usages when evaluating capability of the server you intend to hire. Servers hired today for a specific task may likely get re-purposed over their lifetime.

Also ... if your workload is specialized and data demanding (like database / enterprise resource planning / business intelligence) consider a specialized

server with unique skills, like larger compute, I/O and memory scalability to handle these larger workloads with increased reliability and headroom for peak loads.

ð Energy Efficiency. Newer multi-core servers feature nearly 10x the performance / watt of single core servers. Use the SPECPower benchmark to assess which servers are the most energy efficient.

ð Virtualization. When virtualizing servers, hire servers that can support robust consolidation ratios and built for flexibility and versatility. Many new hardware-assist technologies help boost the ability to migrate virtual machines (application/OS combination) from one server to another.

ð Standardization. Unlike hiring employees where diversity is valued and encouraged, using a smaller number of reference designs in your IT environment, can lower operating and support costs.

A final consideration for hiring new servers is total cost of ownership. Just like hiring people, you must consider the incidental or hidden costs behind the salary and sign-on bonus (do these still exist today?). The average life for a server is 4 years. Buying an inexpensive server for your needs today may optimize today’s budget but may end up costing you over the long run in software licensing, power/cooling. Intel IT recently did an ROI analysis on buying higher end processors and found that using higher end processors reduced TCO significantly – by doing more with less.

Last year, Intel IT fired about 20,000 servers and more are expected to receive pink slips in 2009 - read more about this in the 2008 Intel ITannual perfomance report

If your goals are to lower costs, improve services and boost revenue while increasing business competitiveness, then replacing aging server infrastructure is an Intelligent Investment. Learn more at www.intel.com/go/xeon

Are your single core servers at risk of losing their jobs? If not, they should be!

So the Question is ... Will You Cut IT Costs and Boost Business Competitiveness by downsizing your Server Infrastructure in 2009?

Chris

Energy Efficiency In The Data Center Podcast

david.e.jenkins@intel.com — Tue, 24 Jun 2008 16:00:10 GMT

Energy consumption and energy efficiency issues are becoming more prevalent in the datacenter. This short podcast hosted by the Register provides some insight on topics that IT manager should consider to improve energy efficient performance in the datacenter.

http://www.podtech.net/home/5116/energy-consumption-in-the-data-center

Shall I throw out my old servers and buy new ones? ... Now?

werner.schueler@intel.com — Tue, 20 Nov 2007 14:23:00 GMT

In the second comment around the right time for datacenter refresh, I'd like to look at Costs. Power is covered in the comment from Chris and I covered some comments on Space already in the discussion forum. So what it really boils down to is cost of running your existing datacenter versus the costs of throwing the servers out and replacing them. It is clear also from the other comments, that it doesn't make sense to throw out servers which are utilized in average 15% and have them replaced by new servers, which are 5 times faster and utilize the servers 3%... Great achievement hu?... Server Refresh makes therefore most sense to do only when consolidating the environment. How do I consolidate the environment? By using virtualization. See Helmuts blog and the whole theme next week on that topic.

Therefore let's look at the real cost factors, when refreshing the servers:

Cost of new hardware: That is obviously a significant capital expenditure and starting at about 2000$ for a reasonable DP server. But the trick is also that a lot of server companies offer financing models which make this an operational expenditure. But key is also to understand, that by consolidating your servers at the same time the depreciation costs of the servers may actually decrease, as you have less hardware to depreciate!
Maintenance costs: Again, reducing the number of servers running given applications, and at the same time unifying the environment helps significantly to reduce the maintenance costs. This can be a significant step in unifying on a given OS or hardware platform.
Power consumption: Similar to utilization, it doesn't make sense to just look at the power consumption by server, but at the consumption by performance and therefore I can save about 38% in power bills, on a given workload vs. the previous generation hardware and about a 10^th of the power of hardware which is 2-3years old. Again, obviously only, if I do this in combination of consolidating the servers. Trick often is, that those costs are often not taken into consideration, as those are not billed to the IT department but to the facilities group. So it becomes an executive decision to ensure they are looked at!.
Switching costs. Obviously very hard to measure, as this depends on the environment of the customer. And I talked to the customer who said: "No I will never touch this AS400 system, as it just runs and runs and runs." On the other hand I had a customer who replaced just those AS400 systems and saw huge synergistic effects, because he put the application on a standard based architecture and was able to finally integrate it in the other production system and therefore have one reporting and analytics tool.

I try to make a long story short. This is not something you do very often, but you don't get married every year either. But most of the time it's worth going through the efforts. So thinking about replacing the servers which are older than 2-3years is definitely worth while and often an effort which pays off in the first year!